RBI announces change in market timings, trading hours now 10 am-2pm

MUMBAI: The Reserve Bank of India (RBI) on Friday announced that money markets will function from 10 am to 2 pm, effective 7 April, as the 21-day lockdown and social distancing norms have hit participation.

Domestic money markets used to function from 9 am to 5 pm. The new timings will in force until 17 April, the central bank said.

“The resultant dislocations have adversely impacted the functioning of financial markets. Staff and IT resources have been severely affected, posing operational and logistic risks. The thinning out of activity is impacting market liquidity and increasing volatility of financial prices,” said the RBI in a press release.

The change in timings was necessitated by nearly zero deals in the bond market in the opening hours last week as traders stayed home and did the minimum required to cover their positions. This had led to a spike in yields amid thin volumes and a collapse in trading of government securities.

RBI also had to advance its ?25,000 crore variable repo auction to 26 March from 30 March following a review of the financial condition. The central bank had announced two variable rate term repo auctions of ?25,000 crore each to be conducted on 30 March and 31 March to address the demand for liquidity and to provide flexibility to the banking system.